Management on Decision-making Principles - Term Paper Example

? Management, Term Paper Table of Contents Introduction of the Problem 3 ment of Major Relevant Principles 5 Analysis and Application of Principles 10 Conclusion 13 References 15 Introduction of the Problem This term paper aims to focus on a real life problem, relate it to the existing decision-making principles prevalent, and the analysis of such principles in relation to the existing problems. Here the example of NASA has been included to understand their decision-making framework. NASA deals in astronomical projects which involves various types of risks such as financial risk, life risks, risk of disasters, etc. So being the central body of Aeronautics and Space Administration, NASA prepares a concrete framework for minimizing the risks associated with its missions. According to The Guardian, NASA has been thoroughly criticized because of several shuttle related disasters. It was expected that the space shuttle for the future mission could also suffer the same problems like Challenger or Columbia, if NASA does not remove the systematic flaws in them. A report says that the programs nowadays are schedule driven; funding starved, and involves insufficient safety measure programs. This is the cause for the death of seven astronauts. Though it has been discussed that NASA’s attitude towards security and safety for their missions have increased or changed since 1986, but the disaster of Challenger shows that the mission managers have become used to accepting mechanical and other technical flaws. The major cause of the disaster with Columbia was also the effect of Challenger’s accident. This faulty habit has become embedded in NASA since the last 20 years. The investigation team found that these disasters were not sudden accidents, but the origins of such flaws are rooted into the history of NASA and their space flight culture. The space workers of NASA have already been warned by Sean O’ Keefe, the head of NASA for an ugly report. The report which was issued stated that the managers of NASA missed their opportunity to evaluate the damage of the heat shield, which happened due to the strike of the left wing. Similar incidents have occurred on the previous missions but corrective measures have not been taken for it (The Guardian, 2003). The New York Times also revealed that the space agencies are worried for the catastrophic shuttle accidents that took place in this decade. It has become a threat for the aeronautics and space research sector. The agencies are estimating the catastrophic failure in fiery gradient to the orbit at 1 in 78. An accident of such a stature would destroy the shuttle and kill the astronauts as well. The most risky period in the flight is the ascent, as during this time the engines run at a hazardously high speed, pressure and temperature. The risk of such grim accidents is high despite the three successful flights even after the Challenger disaster. Risk is a major policy issue that NASA needs to consider for their risk management programs. NASA has already proposed a $25 billion worth of space station for transporting the materials and the astronauts on the shuttle and also for the maintenance work, but the risks associated with the programs still prevails (Broad, 1989). Bloomberg revealed that NASA is planning to launch its most expensive and ambitious Mars mission. This also would not be easy because the complicated design of the rover is very risky and it has been termed as “seven minutes of terror”, as it takes about 13,000 mph to complete stop. So this is another risky venture of NASA, which is in the process. The latest estimates of risk of NASA suggest that shuttle accidents are likely to occur even before the space station is completed. It is said that if any other incidents or accidents take place after this, it would cripple the space program and the ambitious projects which NASA is planning in near future (Chang, 2012). For funding the space programs NASA has to keep its audience interested in their programs. The company compares its economic and political risks against the risks and the shuttle flights, for popularizing or making their programs visible. For meeting the deadlines and increase the frequency of shuttle launch, NASA appoints independent contractors on basis of commission or bonus. This communication system of NASA added further to the complexities and the communication issues that arises in the organization was evident from these facts. So the people were unwilling and reluctant to discuss the problems with the managers and raise red flags, which might further slow down the pace of the project and also affect the economic and political scenario (Boin, & Schulman, 2008, p. 1051). Statement of Major Relevant Principles NASA describes risk in triplet format. Triplet format of risk can be explained in the in the following manner. • Scenario of disaster • Quantitative or qualitative probability of risk • Quantitative and qualitative severity of the disaster NASA also gives importance to decision making perspective to solve risk assessment problem. Triplet benefits of decision making can be explained in the following manner. • Distinguishing between high probability- low consequence risk from low probability-high consequence risk • Identifying risk drivers for low probability-low consequence silhouette • Helping authority to determine investment pattern that can minimize uncertainties NASA follows Risk-Informed Decision Making (RIDM) model for finding critical solution to complex disaster situation. Risk management can be done by using integrated model of continuous risk management (CRM) and Risk-Informed Decision Making (RIDM) (Source: NASA, 2010) RIDM RIDM process involves various elements of decision making like risk analysts, stakeholders, the Technical Authorities, subject matter experts (SMEs) and decision-maker in order to ensure values, objective, knowledge are properly communicated and understood by strategic elements to create sustainable and strong decision. The decision making model can be explained in the following manner (Gheorghe & Muresan, 2011, p. 195). Identification of alternative solution • Environment scanning • Probability analysis of available solution and selecting the optimal solution Risk analysis • Testing the optimal solution in response to various risk situation • Establishing technical base for risk assessment Performance committee • Creating performance report on various risk situation • Checking the validity of optimal solution in accordance to previous disaster situation Functional roles for strategic elements of RIDM process can be described in the following manner: Stakeholders – In RIDM model stakeholders play pivotal role on deciding dynamics of decision making. Basic definition suggests that stakeholder as an organization or individual outside of the organization who can be affected directly or indirectly by decisions taken by management. Stakeholders such as Mission Support Offices (MSOs) and Center Directors (CDs) can directly impact decision making process by NASA. Disaster which occurred due to management fault not only hampered the reputation of NASA, but also raised questions on efficiency of stakeholders too. Risk Analysts – NASA recruits risk analyst to forecast future risks associated with projects. Risk analysts are highly qualified individuals. They use probabilistic technique to quantify risk and analyze risk on the ground of safety, cost, technical specification and project schedule. Subject Matter Experts – Subject matter experts are appointed on the basis of requirement for particular project. They have the expertise in particular subjects like physics, chemistry and mathematics and also help NASA in critical situations (Werner & DeSimone, 2011, p. 150). Technical Authorities – They are individuals who are funded independently by NASA to accomplish various task related to aeronautics project. Activity of technical authorities is monitored by administrator of NASA. Engineering association, Health and Medical department and Safety and Mission Assurance Team can be classified as Technical Authorities for decision making process of NASA. Decision-Maker – They have the authority to take decisions regarding particular project. NASA elects senior scientists as project leader and they have the access to higher authority of NASA. Decision makers often directly impacts RIDM model and changes the model in accordance to situation. The following model will help to understand impact of uncertainties on decision making. NASA uses risk informed alternative selection model to refine decision making situation. Risk informed alternative selection model engages decision makers and stake holders. In this stage decision maker emphasizes on further study on risk variables and available alternatives. Performance commitments are done for each step. Performance commitment is used to measure performance capability of each alternative. Probabilistic study is done to measure success factor of each alternative. This probabilistic model is known as risk tolerance. Performance assessment for each alternative is done by risk normalization process. Highest point is assigned for the best performing alternatives and based on performance score further decision making takes place. (Source: NASA, 2010) The above figure shows performance commitment C for performance measure X. Performance measure X is complemented by probability density function. Probability arises due to uncertainty regarding forecasting future disaster incident. Risk area explains risk tolerance level of decision maker in terms of inability to meet expected performance level (NASA, 2010). Now, these models are based on the seven management principles, which are stated here: Having a compelling and clear vision Strong support from the top-level management Sustainable management practices and leadership Transparent and free flow of communication Developing a strong organization Development of effective risk management framework Utilization of the best possible technology Analysis and Application of Principles In this section, the conceptual ideas and principles have been discussed with respect to the space shuttle disaster of NASA that has been in focus these days. The structural defect at NASA is due to the inefficient communication system. The flow of information is limited and the hindrances that prevailed blocked the open and free exchange of the important information for safety. A three level managerial preventive measure has been followed, which consist of Level 1 and Level 2 and Level 3. The Level 1 and Level 2 managers were allowed to take decisions without compromising with the decision-making capabilities of the management. Even if the level 3 managers recommend that the launch is justifiable, but Level 1 and Level 2 managers’ decisions cannot be swayed. The engineers are only answerable to the Level 3 managers. As we have already seen in the section above that NASA utilizes a triplet format risk management framework, which consist of the disaster scenario, the qualitative and quantitative probability of the risks and the severity of the disasters. Based on the triple model and the Risk-informed decision-making model of the organization, the analysis and applications of the principles are stated below: 1. The visions should be clear and compelling. In the early days of NASA, President John F. Kennedy set the goal of NASA, should be to land its shuttle on moon and return safely to earth. NASA introduced Apollo programs after that which required billion of dollars, but the President was enthusiastic enough to push this program forward. However, in this case the lack of vision can be disastrous. This point was proved in the disaster of 2003. 2. It is important to get stable support from the top. Large programs require program protectors for developing and sustaining the outside and inside work. The managers have the responsibility to establish relationship with the stakeholders for maintaining effective working rapport. The X-38 project did not survive because of the lack of top-level protectors. This program was cancelled in spite of intense effort of five years by the major aerospace companies in the world. The project manager of this project also suggested that the inflexible reliability of the project performance also required ethical behavior of the managers. 3. Exercising strong management practices and leadership is necessary. Strong leadership is necessary to develop and identify the duties of the technical staffs and other leaders within the organization. The implementation of sound project management practices, and strictly imposed ethical standards are necessary is necessary. Also hiring smarter people and giving them the resource and responsibility to accomplish the task would also help the management to ascertain that the work is done more efficiently. The test before you fly approach plays a significant role in this regard. This means that the space shuttle would be thoroughly tested before it flies. 4. Open and transparent communication process is very important. As it has been already mentioned in the problem areas, that NASA’s management and space workers lacked free flow of communication. According to the reports of the Challenger accident committee, the loss of the space shuttle called Columbia was due to the faulty communication. It was evident that both success and failure of any mission was depended on the factors of communication. Individual did not dare to come forward to share the critical information, as they would be criticized in public for this. 5. Development of a strong organization is an imperative step towards planning an efficient decision-making model to avert risk. The National Polar-orbiting Operational Environmental Satellite System is one of the best examples of designing a strong organization. This program involved personnel from three different agencies such as NASA, Department of Defense, and National Oceanic and Atmospheric Administration. However, the responsibilities and the roles were carefully negotiated to develop a very well defined framework for the program. This program introduced a new culture, by carrying out the responsibilities in the most effective manner. 6. NASA has always followed the culture of taking risk while pursuing any mission. Organizations have the tendency to repeat their behavior if their strategy results in success. This process can infuse inflexibility when new problems come into play and they require diverse approaches. NASA relied mainly on the qualitative estimates for such risk. As a result of this, NASA addressed all the risks such as the schedules and cost on qualitative basis. They utilized judgmental approach, which could not help in directly evaluating the technical risks. This was a major cause of the mission loss. 7. The implementation of tan effective engineering system and integration was to be included based on the model described. NASA would have to develop stable and clear objectives and outset its requirements according to such objectives. Establishment of a clean system interface is also necessary. Also maintenance of efficient configuration control is necessary. It goes without saying that NASA utilizes modern technology and advanced analytical tools, which also includes hardware development, organizational performance, etc. NASA utilizes a risk management model for continuous risk management and for making decisions related to risk supervision and disaster avoidance. This principle includes various elements such as stakeholders, subject matter experts, risk analysts, so that the knowledge is properly communicated and the strategic elements are rightly explained. This principle or model includes that the alternative solutions should be identified, risks need to be assessed, and various activities by the performance committee should be performed, such as creating the performance report on the various situational risks and also checking the viability of the solutions with relation to the previously identified disaster situation (Mckenndo, n. d.). Conclusion The study was designed keeping in mind the management principles that are required for the decision process to reduce various organizational risks. The solution might differ from organization to organization, but the strategic framework or motives are more or less similar. Here the example of NASA has been chosen to capture few decision-making models which they utilize to avert the disasters that are occurring frequently with their space shuttle. These disasters not only result in loss of life, but also wastage of funds and useful resources. The newspaper articles have been referred to, for highlighting the disasters that took place in NASA with relation to their space shuttle. The lives of the astronauts were scarified and government generated funds for such significant and expensive missions were wasted. In the statement of principle the triple risk model of NASA has been explained, along with the RIDM process, which is the decision-making model followed by NASA. It consist of risk analysis, environment analysis and performance management. These models work on the seven principles, based on the theories of strategic management. Though NASA’s projects are designed based on these decision-making models and the principles stated above, but disasters happen due to negligence, which can be only eradicated if the space managers follow the principles of management set within the organization. References Boin, A., & Schulman, P. (2008). Assessing NASA’s safety culture: The limits and possibilities of high-reliability theory. Retrieved from: http://faculty.cbpp.uaa.alaska.edu/afgjp/PADM610/Assessing%20NASA's%20Safety%20Culture.pdf. Broad, W. J. (1989). High risk of new shuttle disaster leads NASA to consider options. Retrieved from: http://www.nytimes.com/1989/04/09/us/high-risk-of-new-shuttle-disaster-leads-nasa-to-consider-options.html?pagewanted=all&src=pm. Chang, A. (2012). NASA to athletic mars rover: 'stick the landing'. Retrieved from: http://www.businessweek.com/ap/2012-07-31/nasa-to-athletic-mars-rover-stick-the-landing. Gheorghe, A., & Muresan, L. (2011). Energy security: International and local issues, theoretical perspectives, and critical energy infrastructures. Berlin, Heidelberg: Springer. Mckenndo. (no date). The space shuttle challenger disaster: A study in organizational ethics. Retrieved from: http://pirate.shu.edu/~mckenndo/pdfs/The%20Space%20Shuttle%20Challenger%20Disaster.pdf. NASA. (2010). NASA risk informed decision making handbook. Retrieved from http://www.hq.nasa.gov/office/codeq/doctree/NASA_SP2010576.pdf. The Guardian. (2003). Shuttle disaster report criticizes NASA. Retrieved from: http://www.guardian.co.uk/science/2003/aug/26/spaceexploration.columbia. Werner, J. M., & DeSimone, R. L. (2011). Human resource development. Stamford, Connecticut: Cengage Learning. Read More